Local farmers say give tariffs time to work

As farmers look at what could be a bumper crop coming into the fall, talk in the elevators, coffee shops and county fairs involves how the tariffs will affect the prices they will be paid.

When President Trump announced tariffs on Chinese goods coming into the country, China reacted with tariff’s of its own. Corn and soybean markets began a precipitous drop as that large market for American agricultural products began looking elsewhere for a supply.

But for three weeks in a row, corn and soy prices have gained ground, some 30 cents for corn and 70 cents for beans, according to AgWeb.com.

Corn on the Chicago Board came in 1 cent higher Monday but beans took an 8-cent drop.

A few farmers at the Fayette County Free Fair said the tariff fight is needed.

“The Chinese have been getting away with unfair trade for so long, it is time to try to make them a little more honest,” said Steve Wollyung. “It ought to be fair; if they’re doing it we ought to be able to do it.”

Dan Weiler said that China had stolen a lot from the United States, including plant genetics developed in the U.S.

Reuters reported U.S. authorities accused Mo Hailong and six other Chinese nationals in 2013 of digging up seeds from Iowa farms and planning to send them back to China. Mo, an employee of Chinese firm Kings Nower Seed, pleaded guilty to stealing seed grown by U.S. firms Monsanto, Dupont, Pioneer and LG Seeds.

The goal of stealing seeds is to determine the genetic pool and get the traits developed with years of research by those companies, Weiler said.

“That’s not the only thing they’ve stolen,” he said.

“I understand what Trump is trying to do and how long will China hold out because they have all those people to feed,” said Terry Hillman. “They have animals to feed and Argentina and Brazil can’t do it all. Give him some time.”

It is also a matter of trying to save “face” so each side is going to have to give in some, Wollyung added.

“Trump asks for the whole thing but you don’t have to get the whole thing and still have much better than we had,” he said.

The bean market July 31 jumped 28 cents as talk of getting back to the negotiating table made the news. Much, if not all that gain, has been lost since.

Hillman noted all the goods the U.S. buys from China and many, if not most, items in stores are from that country. The U.S. has been able to improve the standard of living of the Chinese people because of the many purchases made of its manufactured items.

To help offset the impact of the reduced pricing, Trump has proposed a $12 billion payment to producers from the Commodity Credit Corp. of the U.S. Department of Agriculture.

Details of the proposal have not been released.

Hillman said the figure came from the estimates of losses or more than $11 billion to farmers as result of the tariffs.

But individual farmers will not receive much and the cost of distributing the funds will be expensive, Wollyung said.

In an interview with Inside Indiana Business, Purdue Agricultural Economist Wally Tyner said the proposed bailout is large enough to have a substantial impact on farm incomes in a year when farm incomes are already distressed, but it doesn’t do a thing for the long term.

“We predict the U.S. will lose 29 percent of our global soybean market if these tariffs stay in effect,” he explained. “The interesting thing to me is that (with these tariffs) the U.S.’s economic well-being goes down, but the economic well-being of China goes down as well. It’s a lose-lose situation for both countries.”

Tyner predicted Brazil will be the real winner in the trade war as the market shifts in favor toward Brazilian soybeans.